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As a matter of full disclosure, the authors have managed clients ’ monies over the last 20 years. In so doing, our starting and ending point has always been transparency as to the basis for and direction of our investment platforms and the ideas supporting them. Throughout this book we have attempted to give the reader the same transparency as to the source of our approaches and positions. Here, our starting and end points are that there is risk in the discipline of asset allocation and that this risk is inherent both in the models that we use and in the discretion that we apply in using them.

Historical examples exist where asset allocation has been, in part, sidetracked by myths, greed, and irresponsible behavior on the part of various market participants—including investors themselves who often search for that “free” portal that offers a “free” option on the accumulation of wealth. Free is so seductive. As we have shown, the cost of asset allocation is not free. The hidden charges can be and have been the horrendous destruction of wealth as individuals became focused at times on the most recent “asset allocation fad.” It’s easy to make the argument that the regulators failed to protect or that investment practitioners failed to be moral. Each of these statements is true. But the defining truth is that investors also have a responsibility for both their decisions and their belief systems.

For the sake of argument, let’s eliminate ...

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